OLDWICK, N.J. - (Business Wire) A.M. Best Co. has affirmed the financial strength rating of A (Excellent) and issuer credit rating (ICR) of “a+” of Travelers Insurance Company Limited (TIC) (United Kingdom). The outlook for both ratings is stable. A.M. Best expects TIC to maintain excellent stand-alone risk-adjusted capitalisation in 2009, supported by a moderate increase in shareholders’ funds from GBP 506 million in 2008. In addition, the ratings factor explicit parental support in the form of a guarantee in respect of all TIC’s liabilities provided by St. Paul Fire and Marine Insurance Company, a subsidiary of its ultimate parent, The Travelers Companies, Inc. (St. Paul, MN) [NYSE: TRV].
A reduction in TIC’s pre-tax profit is expected in 2009, from the GBP 144 million achieved in 2008, largely due to the absence of a material release from prior year reserves (2008: GBP 81 million). Although rates are stabilising, rating conditions for TIC’s main lines of business in the United Kingdom and Ireland remain competitive. A solid net investment yield is anticipated in 2009, albeit lower than the 7% achieved in 2008, a result which benefited from unrealised investment gains of GBP 32.7 million.
TIC has a strong position in the UK market as a specialist underwriter of commercial business and continues to expand its presence in Ireland. In A.M. Best’s opinion, the company is of strategic importance to its U.S.-domiciled ultimate parent as its means of access to these two markets. The company’s gross premiums written are expected to increase by approximately 10% in 2009 (2008: GBP 316 million), driven by growth of its Irish personal lines business.
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Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.
A.M. Best Company
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